IN Technology

But it has decided against including HD-DVD as an integrated drive in its Elite version, which it announced would go on sale in the US and Canada on April 29.

John Rodman, Xbox group product manager, said it would be left to consumers to choose whether they wanted HD-DVD as an extra add-on.

“I think, if nothing else, this is an acknowledgement that Blu-ray is going to win [the standards war],” said Michael Pachter, video games analyst at Wedbush Morgan Securities.

“It would have been a costly mistake to build it into the hardware if HD-DVD loses and I think Microsoft sees this as an unacceptable gamble.”

Sony announced on Tuesday that the Casino Royale movie had become the first high-definition DVD to ship 100,000 units and the Blu-ray title was setting records at retail. Analysts expect Blu-ray titles to have significantly outsold those on HD-DVD in the latest monthly numbers and see Sony increasing its lead when Spiderman 3 is released on Blu-ray later this year.

Mr Pachter said he expected the major movie studios to side with Blu-ray next January after they had seen the results of the holiday season.

Sony is faring less well in its next-generation console battle with Microsoft, whose Elite version is likely to put the PS3 under further pressure.

In contrast to the white 360s with either no hard drive in the basic model or a 20-gigabyte one in the premium version, the Elite will be black and contain a 120Gb hard drive. It will also have upgraded connections, with an HDMI high-definition output and included cable. The console will go on sale at $480 in the US. European and Japanese launches are expected in the summer.

The specification and price comes closer to that of Sony’s PlayStation 3, which has basic and premium versions in black with HDMI connections and 20Gb and 60Gb hard drives, costing $500 and $600.

“This is an acknowledgement that the PS3 was probably priced about right,” said Mr Pachter, referring to criticism that Sony had pitched its price too high, resulting in slow sales.